simple VAT question - help much appreciated

john_kane_2

say I make £10,000 per year from online affiliate work. I have been adding this to pay taxable income amount and thus paying income tax on this. However, I am soon to be reaching the higher band, so additional income will be taxed at 40%.

When I receive the monthly payments, there is an option for VAT. Could I somehow sort this out so I pay 17.5% VAT instead? I am not at all wanting to break the law, but I don't want to pay more tax than I need to.

Thoughts much appreciated.

Pennywise

No, it's both not either. If you were VAT registered, you'd lose 17.5% of your sales/income - ***AND*** 40% income tax, but you could reclaim any VAT you pay to your business suppliers.

john_kane_2

unreal how much we have to pay. given all i am doing is signing up playing to poker sites, do i need to pay any VAT on that in your opinion (obv if your not sure no worries, just wondering). i am providing a service, though as my taxable turnover of around £10k a month for the service i provide is below the registration threshold of about £50k or so, i guess im okay?

trying to make more than an solid amount becomes a lot harding when hitting this 40% barrier.

Pennywise

john_kane wrote: »

unreal how much we have to pay. given all i am doing is signing up playing to poker sites, do i need to pay any VAT on that in your opinion (obv if your not sure no worries, just wondering). i am providing a service, though as my taxable turnover of around £10k a month for the service i provide is below the registration threshold of about £50k or so, i guess im okay?

trying to make more than an solid amount becomes a lot harding when hitting this 40% barrier.

The VAT threshold is £67k PER YEAR. You have to register for VAT if your taxable turnover exceeds this amount - Turnover (i.e. sales) not profit. If your sales are £10k per month as you say, you really need to be talking to either an accountant or the VAT office as it is possible/likely you should have registered before now.

JasonLVC

The VAT threshold is £67,000 in any twelve month period, not per year.

Sorry Pennywise, I'm sure that is what you meant. So if OP is earning £10k per month, OP needs to review the last 12 months, each month and the effective date of (VAT) registration will be the point turnover exceed the £67k threshold.

john_kane_2

thanks for both your help.

i read on another site that if i am receiving these payments from non-EC countries i do not have to pay any VAT. i am receiving my commissions from gibratar, does this mean i do not have to pay VAT?

many thanks for you help

john

blue_monkey_2

John, I thik you are best off asking this question on the Gambling Site as most of the people over there will tell you the right way to go about this.

If you are 'self assessing' on these amounts then you will be able to claim things for 'working from home'. The people on that board will be much more clued up to this so pose the question - maybe asking 'Declaring winnings?'.

HTH

PS. My BIL wins on these sites too but he has never mentioned declaring this income and paying extra tax on it.

john_kane_2

hi blue monkey,

its affiliate income rather than gambling winning, so i have to pay income tax on it (not gambling winnings though). i dont think i will have to about VAT until my turnover gets high enough.